A degree from IIM Ahmedabad could have easily landed Nirmal Kumar a job with a fat pay packet at a multinational company. However, Kumar chose to earn Rs. 45,000 a month, managing a fleet of 10,000 auto rickshaws in Gujarat.
Haggling with an auto rickshaw driver over fare changed the course of life for this physically challenged, 2008 batch graduate from the country's premier management school. Kumar was in the city on Sunday to speak at the TIECON meet on promoting entrepreneurship.
Kumar comes from a modest background, with the family based in Siwan district of Bihar. His father is employed as a primary schoolteacher. Kumar was overcharged by an auto while coming back to the college from a restaurant. He felt cheated, and the idea for a business came to him.
He entered into a deal with the auto drivers who park outside the IIM campus. He assured them free newspapers and an health-cum-personal insurance cover, for which he spent his own money. In return, they only had to give an undertaking that they would charge proper fares.
The idea clicked, and the next tranche of funding came from some companies in Gujarat. The companies happily agreed since the expenditure also accounted for their corporate social responsibility (CSR) activities, he said. "When I needed more funds, I contacted Gujarat chief minister Narendra Modi. The access was easy, and Modi was keen too. I requested his presence at the inauguration too and he obliged. He allotted funds and designated a senior bureaucrat to ensure we got the money," says Kumar.
With funds, Kumar increased the facilities for drivers, and developed the brand 'G Auto'. The drivers got benefits like subsidized health care and education for their wards, besides the insurance. Today, revenue comes from mixed sources, including government, corporate as well as advertisement.
"The vehicles carry ads, from which sizeable revenue is generated, and we can break even. We have formed a trust, which pays my salary and also 21 of my colleagues," he said. Kumar is the managing director of the Nirmal Foundation.
"Even now, anyone flouting the rules loses the benefits and membership of G Auto. But we also fight for the drivers if the cops wrongly harass them," he says.
G Auto was voted second in the SMART Mobility Awards by the University of Michigan on transportation solutions. Recently, the union urban development secretary has written to all the states to emulate the model. Kumar, who also wants to expand, recently met Delhi chief minister Sheila Dixit with plans for the national capital.
Use of technology has enabled better monitoring of the vehicles through GPS. The vehicles also have computerized meters, which cannot be tweaked, says Kumar. Like a radio cab, customers can request a G auto from a call centre or through a free mobile phone app.
Kumar's analysis is that a day's income for an auto rickshaw driver does not go beyond the minimum wage of Rs250, after all expenses and vehicle maintenance is taken into account. Nirmal Foundation's system ensures they get more trips with the help of the call centre facility. The volumes compensate for the low margins, he said.
On whether he regrets not having chosen the beaten path, Kumar says, "Today, my batch mates want to emulate me, but it is not the other way round."